Cost Efficient Operations Cost Efficient Operations at Fira - PowerPoint PPT Presentation

Cost Efficient Operations Cost Efficient Operations at Fira Barcelona at Fira Barcelona How to focus on what really counts How to focus on what really counts

Introduction Halls 5 & 7 • 2 venues: Montjuïc and Gran Via • under expansion with 2 new halls in Gran Via. • publicly owned company with private management: funded with its own profit .

Objective Challenges to complete the expansion: 1. Reduce current costs and free up resources 2. Reinvest these resources in the growth 3. Increase the value (better quality & service, less cost).

Analysis and Diagnosis Step 1 current processes, organization and costs Analysis & were analyzed and barriers identified Diagnosis • Lack of information and appropiate indicators • Vertical organization, not horizontal • Responsibilities unclear and little teamwork • Mindset reluctant to change • Limited Scope in operating Strategy

Barriers and Action Plan Step 1 Areas to tackle to overcome the barriers identified Analysis & Diagnosis Information and indicators Step 2 Step 3 Step 4 Organization Select Changes in Projects on indicators organization Value Value creation

Establish indicators & new cost Step 2 information system to measure the Indicators effectiveness of the actions and track their results.  Implement & exploit Business Intelligence Module (SAP BW)  Specific Key Performance Indicators (KPI’s) to track results were developed.  € /m2 (net) for all cost components  Comparison: Actual vs previous edition, actual vs plan and vs. Estimated (SAP)  Specific and measurable Cost objectives were set, and become visible in every department.  Weekly, monthly, quarter and anual review with all teams  Cost Deployment. These objectives were linked to variable compensation (bonus) of all involved.  up to 10-20% of bonus contribution

Make organizational changes Step 3 required to implement the improvement projects. Changes in organization  One Operations controller * was assigned to the area of operations.  An Operations cost control Committee was established.  One new Operations planning position was created within the planning team.  One new Operations purchasing position is approved and recruited.

Analysis of value Step 4 understand what value means and execute the Projects on Value projects to increase value proposition . • Identify Value added and non value added activities • Select projects to: • minimize non-value added activities (NVAA) • enhance value-added activities (VAA) Step 4.0 Step 4.1 Step 4.2 Minimize Analysis of Enhance NVAA Value VAA

Select value areas to work Step 4.1 Identify main contributors to NVAA Minimize NVAA Cost Human effort 100% set up costs waiting time 90% access control 80% security walking 70% carpet 60% health & safety cleaning 50% customer services complaint 40% management signage 30% air conditioned customer service 20% registration 10% activities waste management coordination 0% Position 1 Position 2 0% 2% 4% 6% 8% 10% 12% 14% Projects to develop: * * Customer Cleaning Maintenance Security * services Process optimization * * Waste Set up Other Energy management costs

Security cost reduction Step 4.1 Reduction of security (including access and Minimize registration) NVAA  Increase productivity through automation  New additional supplier  Adjustment of security and access schedules. Security cost evolution (Reduction index 2009 vs 2007) 2007 Structural - venue 2008 -17% Operating - 2009 exhibitions -38% 2010 0 500 1.000 1.500 2.000 2.500 Cost (m € )

Security cost reduction Step 4.1 Reduction of security (including access and Minimize registration) NVAA  Development of optimized registration services based on pre-registration plus onsite fast track system: Self-service laptops Registration confirmation (bar code) Auto Check- in Kiosks Pre-Registration

Energy cost reduction Step 4.1 Minimize Air Power Light Water NVAA conditioned  Redefining the lightning schedules (“venue shutdown”)  Replacing incandescent illumination by LEDs Ejemplo: pantalla de gestión de una planta climatización  Adjusting setpoints to 22ºC (winter) and 24ºC (summer)  District heating & cooling system  Energy management system  Re-negotiating contracts  Solar cell panels installed (135.000m2 up to 5 Gwh/year)  Installation of water-free toilettes

Waste cost reduction: strategy Step 4.1 • eco-design Minimize 1. Reduce generation • add recycled product in sales portfolio NVAA • no free containers 2. Control of • credit card guarantee abandoned waste • patrols & penalties • new cleaning process – by material 3. Increase recycling • new cleaning supplier Disposal Exhibition Waste Materials New procedure Control and supplier Eco-design Recycling Patrols New recyclable materials in sales portfolio

Waste cost reduction: actions Step 4.1 1. Reduce generation Minimize b) New green products in portfolio NVAA a) Eco-design guide c) Joint initiatives with organizers 2. Control of 3. Increase recycling abandoned waste a) Waste composition study (%) b) Selective waste collection points a) No free containers in the halls wood (contracted and under control) 6 8 paper/carton 29 5 textile c) Specific treatment per material 6 plastic (film) bottles/cans b) Patrolling+pictures (credit card guarantee) 17 Organic 28 Other d) Specific recycling projects (p.eg. Carpet)

Waste cost reduction: results Step 4.1 Minimize Exhibition Disposal Waste Materials NVAA Recycling Results Cost evolution SITC SONIMAGFOTO CONSTRUMAT PISCINA -86% BCN RAIL previous previous edition edition ECOCITY Exhibition Exhibition -51% ANTIQUARIS AUTOMÒBIL 2009 -78% INFANCIA 2009 MAQUITEC EXPOHOGAR Prim NÀUTIC EXPOHOGAR Tard -36% ESTUDIA 0 50 100 150 200 250 300 0 5 10 15 20 cost (m € ) cost (m € )

Summary of projects on Step 4.1 cost reduction Minimize NVAA Results (Reduction index 2009 vs 2007) Exhibitions Operational Cost Venue Structural Cost  automated office accesses  optimization of positions Security -38% -17%  access scheduled reviewed  new supplier -23% Energy  energy project  energy project -34%  new process  frequency optimization -47% Cleaning -16%  change of supplier  change of supplier  eco-design  frequency optimization Waste -73% Maintenance  Patrols management  contract re-negotation  recycling -16%  overheads, ITC, Set up  standard signage Other -33% transport, supplies... costs  less carpet  optimization Customer -24% of positions services

Human Effort reduction Step 4.1 by using ECRS (Eliminate, Combine, Reduce and Minimize Simplify) NVAA • Optimization of planning process: from coordination of roles, to small team. • ICT Projects to replace processes based on telephone, fax and photocopies, to web interfaces (faster, less effort and less prone to mistake). Exhibitor online E-commerce Supplier portal Footprints (complaints management) • Externalizing non core processes: p.eg. Warehouse, customs

Develop projects to Step 4.2 increase value. Enhance Exploiting sinergies in the supply chain VAA  Kraljic Matrix: to guide the purchasing negotiation efforts. All contracts were re-newed (cleaning, rigging, electrics, carpet, hostesses, security, etc.). Kraljic Model Purchasing Portfolio management High Leverage Items Strategic Items Cleaning & Stand building, logistics Exploitation of Diversify, balance or waste Impact purchasing power exploit Profit Power, rigging security Bottleneck Items Non-critical Items Air-conditioning rental Low Efficient progressing Volume Assurance Low High Supply Risk  Vertical Integration. Firesa and Servifira Project. Developing new business models, creating 2 joint ventures

Overall results Since the start of this program : 1. Operating costs and Venue Structural costs have reduced in 42% and 21% respectively Exhibitions Operational Cost Venue Structural Cost Energy 2007 2007 Cleaning Customer services 2008 2008 Energy Logistics Services 2009 Security 2009 Set up costs 2010 (budget) Total 2010 (budget) Total 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%

Overall results Since the start of this program : 2. Reinvestment of savings has generated 29% additional revenues in new products and services (whilst operating cost has reduced 22% ) Contribution for new services Operational Cost contribution 150% + 29% 100% -22% 125% 80% 100% 60% 75% 40% 50% 20% 25% 0% 0% 2007 2008 2009 2010 2007 2008 2009 2010 (budget) (budget)

Overall results Since the start of this program : 3. The number of complaints in services to exhibitors has dropped above 80% Evolution of complaints in exhibitor services 0,5 Reduction index 2010 vs 2007 0,4 Complaints per exhibitor (average) 0,3 -83% 0,2 exhibitors (%) with 0,1 complaints -77% 0 2007 2008 2009 Year to date 2010

Success!! Objective Challenges to complete the expansion: 1. Reduce current costs and free up resources - 42% operating cost + 22% released resources - 21% structural cost 2. Reinvest these resources in the growth + 29% additional business (new services) 3. Increase the value (better quality & service, less cost). - 80% complaints in exhibitor services